Insights & Analysis
Rule 6(5) and the 'Exclusively' Test: Madras High Court Upholds Full CENVAT Credit for an IT Park Operator but Sustains Service Tax on Fit-Out Charges
In Commissioner of GST & Central Excise v. Ascendas IT Park (Chennai) Ltd., a Division Bench of the Madras High Court reads the word 'exclusively' in Rule 6(5) literally, rejects a Board circular as irrelevant, and yet rules for the Department on service tax on fit-outs.
13 min readCENVAT Credit on Capital Goods Supplied Under a Works Contract Is Not Barred by the Contractor's Valuation Under Rule 2A: CESTAT Chennai in Toshiba JSW Power Systems
A Chennai Bench of the Tribunal accepted that the supply and erection orders were one works contract, yet allowed the recipient's credit, setting aside a notice demand of Rs.1,93,97,137. The credit bar in the Explanation to Rule 3 of the CENVAT Credit Rules, 2004 does not follow the goods into the recipient's hands, and the extended period was held unavailable.
15 min readPaid Under Doubt, Refunded Never: CESTAT Mumbai Holds That Service Tax Paid on Exempt Educational Support Services Cannot Be Reclaimed Without Challenging the Self-Assessment
Sodexo paid service tax on housekeeping and canteen services to educational institutions, then learnt from a Board circular that the services were exempt. The Mumbai Bench of CESTAT refuses the refund on three footings: the self-assessment was never challenged, limitation did not restart with the circular, and credit notes did not cure unjust enrichment.
14 min readTax Paid on an Audit Finding, Then Sued for Under Section 74: Orissa High Court Stays Coercive Recovery in Global Coal and Mining
A Division Bench of the Orissa High Court has issued notice and restrained coercive action on a Section 74 order for 2019-20, where the assessee had paid the tax on the audit finding and the Department had written that the audit proceedings stood closed. The Court's reasoning is prima facie and interim, but it states plainly that the conditions for Section 74 were not satisfied.
14 min readA Refund Cannot Be Swept Against a Stayed Demand: Bombay High Court on Appropriation After the 20% Pre-Deposit Under Section 112 of the CGST Act
The Department sanctioned Trivitron Healthcare a net GST refund of Rs. 64,01,750 and then adjusted every rupee of it against a 2017-20 demand that was under appeal. The Bombay High Court held that, with the pre-deposit paid and recovery stayed, the adjustment could not stand, and ordered the money restored within four weeks.
13 min readA Reply Handed Over at the Hearing Must Be Read: Orissa High Court Sets Aside Section 74 Order That Treated a Manually Filed Reply as No Reply
A Division Bench of the Orissa High Court has quashed a Section 74 order for 2019-20 that proceeded as if no reply existed, although the Superintendent had signed an acknowledgment of the contractor's written reply. The Court held that Rule 142(4) of the CGST Rules does not make electronic filing a condition of being heard, remitted the matter, and left the limitation and jurisdiction questions open.
13 min readCredit of Concessional Countervailing Duty on Imported Coal Is Not Cut Down by Excise Conditions: Rajasthan High Court Dismisses Revenue's Appeals Against Hindustan Zinc
A Division Bench of the Rajasthan High Court has refused to read the excise-side restrictions of Rule 3(1)(i) of the CENVAT Credit Rules, 2004 into Rule 3(1)(vii), upholding Hindustan Zinc's credit of concessional additional customs duty on imported steam coal across five demands totalling Rs.51,47,27,714. The reasoning is brief and leans on a Calcutta High Court ruling and a departmental advisory minute, which makes its limits as important as its result.
14 min readThe Date on the Notice, Not the Date on the Form: Delhi High Court on Limitation Under Section 74(2) and 74(10) and Forms GST DRC-01 and DRC-07
Two writ petitions argued that a show cause notice and an order were time-barred because the electronic summary forms carried later dates. The Delhi High Court rejects the argument on the statute and Rule 142, and sends the fraud and ITC grounds to the appellate authority under Section 107.
13 min readA Registered Public Trust Needs No Proof of Income Use to Evict: Madhya Pradesh High Court on the Accommodation Control Act Exemption
In Sharafat Ali v. Panjikrat Sarvajanik Trust Mandir Murti Shri Murli Manohar Ji, the High Court dismissed four second appeals by shop tenants of a Sheopur temple trust, holding that registration alone brings a trust within the 1989 exemption notification and that one trustee, authorised by a resolution of all, can sue for eviction.
12 min read